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2019 DIGILAW 1171 (DEL)

Fertilizer Association of India v. Union of India

2019-04-23

SURESH KUMAR KAIT

body2019
JUDGMENT : Suresh Kumar Kait, J. Cm APPL. 8017/2015 in W.P.(C) 3050/2012 The facts of this case are that vide the writ petition, the petitioner sought direction thereby directing the respondent nos.1 & 2 to include/recognize the 'Marketing Margin' as part of cost of delivered gas supplied to the member-Fertilizer units of petitioner association for the purpose of calculation of costs of production of UREA in order to correctly determine the Fertilizers subsidy and reimbursement of the difference between the cost of production of UREA and its Sale Price (MRP) under the NPS Pricing Policy. Consequently, direct the aforesaid respondents to reimburse the fertilizer manufacturer units, the 'Marketing Margin' paid by the member Fertilizer units of petitioner's/association while calculating the cost of UREA in determining the subsidy to be given to the said units. 2. The writ petition came before this court for hearing on 12.11.2014 and the same was disposed of by recording that respondent no. 2 had also considered the 'Marketing Margin' of Rs.200/- MSCM as reasonable for the purpose of subsidy. Learned counsel for the respondent no.2 stated that the process of determining the quantum of subsidy payable, including on account of 'Marketing Margin' is underway and for that purpose a consultant was being appointed. Further stated that within the period of 12 weeks, a final report would be available and a decision would be taken by the respondents as to the final quantum of subsidy that has to be paid including on account of the 'Marketing Margin'. Though he submitted that fixing a 'Marketing Margin' @ Rs.200/- MSCM would create complications and the subsidy would have to be reworked, however, the learned counsel for respondent no.2 was not able to point out any implications, therefore, vide order dated 12.11.2014, this court directed that the respondent shall consider including a 'Marketing Margin' @ Rs.200/- MSCM for domestically produced gas including gas from KG-D6 basin and an appropriate amount would be paid as an interim measure. 3. The court further observed that to avoid any complication, the said amount would not be considered by the consultant while computing the subsidy or by the board while determining the quantum of subsidy and would be treated as an adhoc amount to be adjusted in future. After the subsidy has been fixed, the said adhoc amount released to the manufacturers would be deducted from the subsidy payable to them in future. After the subsidy has been fixed, the said adhoc amount released to the manufacturers would be deducted from the subsidy payable to them in future. In the event, said payment is in excess of a manufacturer’s entitlement, the respondent shall be entitled to recover the same. The said adhoc amount released to the manufacturers as an interim measure would be released to the manufacturers only on their furnishing an undertaking to the respondents to comply with the final adjustments that may be necessary for the final amount of subsidy is fixed. 4. In view of this statement made by learned counsel for the respondents that a final subsidy would be determined within a period of 12 weeks, the writ petition was disposed of. 5. Thereafter, the present application was filed for extension of time till June, 2015 to comply with the aforesaid order dated 12.11.2014. Simultaneously, the respondents challenged the order dated 12.11.2014 in LPA 371/2016 and the same was dismissed vide order dated 27.09.2018. The order of LPA was challenged by the respondents in SLP (C) vide diary number 826/2019 and the same was also dismissed on 22.02.2019. 6. The case of the writ petitioner is that 'Marketing Margin' is due to it from when the supply started and when petitioner paid the entire amount to RIL as per rate and formula finalized by the respondent/Union of India. The said ground was challenged in LPA and SLP, however, the applicants/respondents failed to succeed before the two courts mentioned above. 7. Learned senior counsel appearing for the writ petitioner submits that the affidavit dated 19.03.2019 is contempt of the court of order dated 12.11.2014 on the ground that petitioner is entitled in 'Marketing Margin' w.e.f. 18.11.2015 based on the assumption of the quantity of gas procured during the same period of October, 2015. 8. Learned senior counsel further submits that the date of 18.11.2015 has no base whereas case of the petitioner is that the rights of the petitioner to MM accrued with the supply of RIL Gas in May, 2009 when they were asked to pay 'Marketing Margin' (MM) to RIL under formula arrived at by the RIL and Government which stands admitted in affidavit dated 21.01.2014. 9. On the other hand, Ms. 9. On the other hand, Ms. Maninder Acharya, learned Additional Solicitor General submitted that the writ petition was disposed of vide order dated 12.11.2014 and thereafter a CCEA Note moved by MoP&NG was approved by CCEA in its meeting held on 18.11.2015. Based on the minutes of the meeting of CCEA, MoP&NG issued a notification dated 24.11.2015 and made it effective from the date of meeting of CCEA. Vide this notification, 'Marketing Margin' upto a maximum of Rs.200 per 1000 SCM @ NCV of 1000 Kcal/SCM was levied on any domestic gas being produced within the country and supplied it to Fertilizer (UREA) and LPG producers in the country. The said decision was effective from the date of CCEA approval i.e. 18.11.2010. In view of the above, Department of Fertilizers had released an adhoc amount of Rs.1,75,21,000/- as 'Marketing Margin' to the UREA manufacturing units on 02.12.2015 w.e.f. 18.11.2015 based on the assumption of the quantity of gas procured during the same period of October, 2015. The difference in amount paid to the UREA units is to be adjusted in future payments based on the actual consumption. 10. Learned ASG further submits that the aforesaid judgment dated 12.11.2014 does not specify any date from which 'Marketing Margin' is to be considered for calculation of subsidy purpose for UREA manufacturing units. From the plain reading of the order/judgment dated 12.11.2014, it is clear that the said decision of the CCEA was to be given effect prospectively. Moreover, the orders in LPA and SLP nowhere mention any specific date of payment of 'Marketing Margin' to be given to the petitioner. The Department of Fertilizers also released amount of Rs.27.23 crores as interim measure in terms of order dated 12.11.2014 from the date of submission of the undertaking by the concerned companies. The issue before this court is that vide affidavit dated 19.03.2019 filed by the applicant/respondents that vide notification dated 24.11.2015 by MoP&NG, it has been notified that 'Marketing Margin' to a maximum of Rs.200 per 1000 SCM may be levied on any domestic gas being produced within the country and supplied to Fertilizers and LPG producers in the country. The said decision will be effective from the date of Cabinet approval i.e. 18.11.2015. 11. The said decision will be effective from the date of Cabinet approval i.e. 18.11.2015. 11. Vide the present application, the applicants/respondents sought time again and again to comply with the order dated 12.11.2014 and now pursuant to the said order, the applicants/respondents have taken decision and same is evident vide affidavit dated 19.03.2019. Now the issue raised by the petitioner is that the decision would have from 2002 and not from w.e.f. 18.11.2015. 12. During arguments, learned ASG has, on instructions, admitted that instead of 18.11.2015, the decision would have been from the date of the order i.e. 12.11.2014 and to that effect they will get approval from the Cabinet to which the petitioner did not agree. 13. Since the writ petition has already been disposed of vide order dated 12.11.2014 and vide the present application, the applicants/respondents sought time to comply with the said order to that effect decision has been with effect from 18.11.2015. Therefore, in this application, it cannot be determined from which date the petitioner is entitled for the benefit sought, accordingly, I hereby close the present application with granting liberty to the writ petitioner to challenge the same on proper petition as to from which date the benefits should be provided to the petitioner. 14. The application is, accordingly, disposed of.